New York residents affected by the April 2-4 storms and floods may be eligible for various forms of tax relief that could lessen some losses, federal and state recovery officials said.
The U.S. Internal Revenue Service permits those with casualty losses suffered as a result of the disaster to claim this year’s losses on last year’s return or amend last year’s return if it is has already been mailed in. This can result in a quicker refund than is available if the losses are filed on returns for 2004.
Casualty losses for tax purposes generally are based on the decrease in fair market value of the property as a result of the disaster, minus any insurance payments or other reimbursements received. The IRS will ask for the latest tax return, estimates of repairs, before and after photographs, appraisals or any other loss documentation.
The disaster tax program is available to taxpayers living in one of the disaster-declared counties who have sustained losses as a direct result of the severe storms and floods. The eligible counties are Broome, Cayuga, Chautauqua, Chenango, Columbia, Cortland, Delaware, Madison, Montgomery, Orange, Putnam, Rensselaer, Schenectady, Schoharie, Sullivan, Tioga and Ulster.
Anyone affected by the disaster are advised to check with their local county assessor about the possibility of claiming a reduction in the taxable value of property destroyed or damaged.
The amount of reduction is prorated based on the calendar quarter in which the damage occurred. Property owners must file an application with the county auditor for a reduction within 30 days of the end of the quarter in which the damage occurred.
Casualty losses can be claimed on IRS for 4684. A copy of IRS publication 547 and 2194 can help with guidance through the process. Both the form and publication, and more information, can be found at the IRS Web site at www.IRS.gov or by calling toll free at 1-800-829-1040.
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